Ecopetrol S.A.

Good morning. My name is Natalia and I will be your operator today. Welcome to Ecopetrol's earnings conference call, in which we will discuss the main financial and operating results as of the third quarter of 2024. There will be a questions and answer session at the end of the presentation. Before we begin, it is important to mention that the comments in this call by Ecopetrol senior management include projections of the company's future performance. These projections do not constitute any commitment as to future results, nor do they take into account risks or uncertainties that could materialize. As a result, Ecopetrol assumes no responsibility in the event that future results are different from the projections shared on this conference call. The call will be led by Mr. Ricardo Roa, CEO of Ecopetrol. Rafael Guzman, Acting Executive Vice President of Hydrocarbons, Camilo Barco, CFO, and David Riaña, Executive Vice President of Transition Energies. Thank you for your attention. Mr. Roa, you may begin your conference.

Welcome to the Operational and Financial Results Call of the Ecopetrol Group of September 2024. I am pleased to report that we have maintained solid growth across all our operational segments, reflecting the commitment and dedication of our team as well as the company's resilience in addressing operational and environmental challenges. By the end of September of 2024, we achieved a production of 752,000 barrels of oil equivalent, a figure we have not seen in the last nine years. Additionally, we transport an average of 1,126,000 barrels per day and reach the highest level of refining to put in the history of our refineries, with an average of 418,000 barrels per day. In terms of production, I would like to highlight the status operations at the Orotoya Station, which received the first barrel of crude oil from the Acacias Field in October. This facility will be able to process up to 15,000 barrels of crude oil, 60,000 barrels of water, and 700,000 cubic feet of gas daily. In the medium term, it could reach up to 50,000 barrels of crude oil per day, ensuring production and reserves for the coming years. Regarding the offshore exploration, I scan out the positive ruling from the Santa Marta Court, which allows us to continue our operations at the Sirius II, while crucial for the country's energy security. In the transportation segment, We successfully secured the evacuation of all our fields, overcoming the challenges faced during the quarter and achieving the highest transport volumes in the last five years. As for refining, we reached a history-high proposed and continued warranty fuel supply to the country while progressing on the execution of our annual plant shutdown and major maintenance plans at our refineries. I also highlight the successful preparation and execution of the industrial production test for the Sustainable Aviation Fuel Sub, demonstrating our commitment to cleaner operations and products. Let's move to the next slide, please. Despite the pressure from external factors such as exchange rate and inflation, our operational and financial performance placed us at a historically high level for the last nine years of the company. We closed the first nine months of the year with revenues of 98.5 trillion pesos, an EBITDA of 42.3 trillion pesos, and a net profit of 11 trillion pesos. When normalized, excluding external factors, it would be 16.4 trillion pesos, an increase of nearly 10% compared to the same period in 2023. Our EBITDA margin of 43% demonstrates our strong ability to maintain profitability in a challenging environment. This quarter, we achieved historical sales above 1 million barrels of oil equivalent per day, maintaining our efficiency with a single digit truth differential. Regarding debt, I would like to highlight the successful liability management transaction executed in the international market, so $1.75 billion. The oversubscription was 2.6 times with participation from over 200 investors from the United States, Europe, Asia, and Latin America. This transaction showed Ecopetrol's strong credit profile with the lowest spread and coupon obtained by the company in the last two years. Finally, the receivable account from the fuel price stabilization fund was 65% lower compared to the same period last year, allowing better conditions for the execution of our 2025 investment plan. Now let's move to the next slide. Regarding PSG, I want to mention the following milestone as of September. In the environmental front, we have achieved a cumulative reduction since 2020 of 1.89 million tons of CO2 equivalent in scope one and two emissions in our operations. As of September, we have already completed 97% of our annual target emissions. for 2024. Additionally, we have reached a cumulative energy optimization since 2018 of 14.24 petajoules, which is equivalent to the annual energy consumption of the apartments of Boyacá, Huila, and La Guajira in Colombia. Socially, the Ecopetrol Group has invested over 341 billion pesos in sustainable territorial development. I highlight the completion of nine projects in lieu of taxes during the third quarter of 2024, valued at 26 billion pesos and benefiting 38,000 students in the departments of Meta, Bolívar, and Tolima. Since 2018, this mechanism has allowed the Ecopetrol Group to complete 63 projects valued at 471 billion pesos. In terms of science, technology, and innovation, we have implemented over 100 digital solutions promoting energy efficiency and decarbonization. By measuring the contribution to the net income and regional GDP from our investment, we prove how sustainability generates financial benefits and acts as a catalyst for the country's economic development. In terms of governance, I want to recognize the effectiveness of our association's internal policies. Currently, 65% of our executives come from internal talent and have extensive experiences in the sector. Finally, I want to highlight Ecopetrol's participation in COP16 as host and panelist in a total of 33 events. I now hand over to Rafael Guzman, who will speak about the hydrocarbons segment.

Thank you, Ricardo. As of September, exploration capex of $330 million has been recorded as the highest within the last four years. By year end, we estimate the drilling of 16 exploration wells, one additional well versus the previously announced plan. In the 2024 exploration campaign, we advanced with the drilling of 10 wells. One, the Sirius II well, was declared successful, located in the Caribbean offshore. Onshore, we completed the drilling of five wells that are currently undergoing long-term production testing. These wells are Guamal Profundo 1, operated by Ecopetrol in association with Repsol, Caripeto 1, operated by Sierra Col, and Toritos Sur 1, Toritos 2, Toritos North 1 wells, operated by Geopark in partnership with our subsidiary, Ocol. By the end of October, the last three wells, plus Visigita 1 well, reached production of almost 2,000 barrels of oil production per day, increasing total production from Janus 123 block by 49%. Lastly, we had four wells with no commercial hydrocarbon volumes, corresponding to Milonga 1, Monchink 1, Sidetrack 1, Rocoto 1, and Pau Brasil 1 wells. The following wells are being drilled. Arantes 1 operated by PAREX, Floreña N18 operated by Eco Patrol, both located in the Pied de Monte, Llanero, and Vizbita East 1 well operated by Geopark located in the Eastern Plains. Also, we began drilling the Sirius II sidetrack well to perform information testing and acquisition of subsurface information necessary for the development of the project. Furthermore, the GATSOMATO project is in the final planning phase, awaiting for the final investment decision to be made by the consortium members. This date is estimated to be first half of 2025. Related to progress with government entities, Since 2023, we have been developing an agenda with the National Hydrocarbon Agency and the Ministry of Mines and Energy of Colombia with the aim to increase activities in the areas of existing contracts and agreements, achieving the following. 2024, which allows us to access exploratory prospects in the Middle Magdalena Valley. And second, the extension of 15 contracts, prolonging their exploratory period from two to five years. Let's move to the next slide, please. Our offshore Caribbean portfolio has a discovered and prospective resources potential amounting to 75 teracubic feet of gas. As you can see in the map, we have three clusters. The North Caribbean cluster in partnership with Petrobras in the Gua of Zero block, where the serial discovery is located and for which I will elaborate in the next slide. In this block, we expect to drill two new prospects by 2025 in order to confirm the potential of the block. the South Caribbean Cluster in association with Shell, where the Kronos, Gorgon, and Glascos discoveries are located, and finally the Ultratib Water Cluster in association with Oxy and Darko, where the cold one block is located, in which the Comodo X1 well is expected to be drilled. Once the environmental license is granted by the National Environmental Licensing Authority, ANDA, we need to find together with the operator a right slot that coincides with the appropriate weather window. Let's move to the next slide, please. We are pleased with the favorable decision of the Santa Marta Court that allows us to continue with operations at the Serious 2 sidetrack 1 well. Meanwhile, we are awaiting a decision from authorities on whether or not the prior consultation is needed. We expect this decision by November 30th. The good news is that we expect to continue to move forward with operations according to the schedule, even if the prior consultation is required. With the information so far obtained from the Series 2 appraisal well, the extension of the Series 1 discovery well was confirmed, with an estimated original in situ volume potential to date of 6 tera cubic feet. As is shown in the timeline in the graph below, we are integrating the process to reduce the time to market of the Colombian Caribbean offshore projects, carrying out in parallel to the exploration and appraisal the development activities in order to declare commerciality between 2026 and 2028 and gradually start the progression of resources to reserves. In 2025, we expect to start engineering development and production of gas for the domestic market between 2029 and 2030. As explained in the upper right graph, four environmental licenses are required for the development of the serious discovery. First, the subsea development of the serious field. Second, the construction of the subsea line that will transport production to the Ballena complex, which already has a proposed route. Third, the beach crossing point with the facilities. And the last one, for the onshore facilities at the Ballena complex, which serve as a connection node with the national transportation system. Let's move to the next slide, please. In the first nine months of the year, the Ecopetrol Group reached a production of 752,000 barrels of oil equivalent per day, an increase of 22,000 barrels of oil equivalent per day compared to the same period of the previous year. As it can be seen in the graph of the left side, production is leveraged on the production growth of our subsidiaries, where Permian's production stands out with a contribution of 95,200 barrels of oil equivalent per day, and sustained domestic crude oil production leveraged by Cañosur, Rubiales, Rex Noreste, Castilla, and Chichime fields, which almost fully offset the natural decline. On the other hand, deferred production due to social and rest issues was 6,800 barrels of oil equivalent per day, representing less than 1% of Ecopetrol's group total production and in line with previous years. In terms of drilling activity, we advanced with 343 development wells drilled and completed, maintaining the levels of previous years with an average occupancy rate of 23 rigs. The upstream net income reached 2.7 trillion pesos for the third quarter of the year, reflecting an increase of 2.4% compared to the same period of the previous year, mainly leveraged on higher production levels, better prices in our crude oil basket, and lower tax provisions. On the right-hand side of the slide, I would like to highlight two main projects. First, the entry of the auto-toil production station, which, as Ricardo previously mentioned, will leverage the future reserves of Block CP09. It will enable a progressive increase in Ecopetrol's net production of 5,000 barrels per day at the end of 2024 and up to 25,000 barrels of oil per day from 2026. as one of the region's major producers. Second, regarding the air injection pilot at Chichimene, the National Hydrocarbon Agency and the National This pilot has allowed us to incorporate 915 million barrels of oil in contingent resources, which demonstrates the potential for large-scale implementation. Let's move to the next slide, please. In the midstream segment, transported volumes in the first nine months increased by more than 21,000 barrels per day compared to the same period of 2023. mainly leveraged by the increasing crude oil production in the Llanos area, coupled with the higher deliveries of Castilla Norte crude coming from Barranca Vermelha. Due to the damages caused by third parties to the Cañalmon-Covenas pipeline during the third quarter of 2024, Four reversal cycles of the bicentennial pipeline were carried out, evacuating more than a million barrels, thus ensuring the production of the canelmon field. Lastly, the midstream segment maintained a solid financial performance during the first nine months of the year, adding up an EBITDA of 8.3 trillion pesos, representing 20%. of the Ecopetrol Group. The EBITDA reduction compared to the first nine months of 2023 is mainly explained by external effects such as exchange rate and inflation, partially compensated by higher revenues and cost efficiencies as shown in the bottom right figure. Let's move to the next slide. As of September 2024, the refineries achieved historic throughputs of 418,000 barrels per day. This was accomplished even under a challenging environment and an intense period of major schedule maintenances. The Cartagena Refinery completed its maintenance plans and the Barranca Bermeja Refinery intervened 85% of the units. ensuring the reliability of its assets. Refining gross margin decreased by $13.6 per barrel versus the third quarter of 2023 to $7 per barrel. 75% of this impact is due to the drop of international fuel prices, mainly gasoline and diesel. 14% impacted by the execution of the first major scheduled maintenance of the hydrocracking unit at the Cartagena Refinery, which, since its start-up in 2016, completed its first eight-year cycle. 9% mainly due to the effect of the lower availability of light crude oil at the Barranca Bermeja Refinery as a result of the attacks of the Caño Limón-Coveñas pipeline. And the remaining 2% was the result of the power shutdown at the Cartagena refinery, which, thanks to the timely response of the teams, was overcome in two days, guaranteeing the national fuel supply and where our subsidiary ISA provided support to ensure the continuity of energy supply. In addition, implementation of a plan consisting of 16 actions to mitigate fewer power supply risks at its facilities. As a result, the EBITDA for the year was 2 trillion pesos, 72% less than the same period of 2023, mainly affected by the aforementioned factors, in addition to the exchange rate and inflation effects. Normalizing these external variables, EBITDA would have been 7.1 trillion pesos for the year, with an EBITDA margin of 13.8%. By year end, we expect to close the year with an average throughput between 415 to 420,000 barrels per day. Let's go to the next slide. During the first nine months of 2024, Ecopetrol continued to materialize its comprehensive efficiencies and competitiveness strategy with a contribution of 3.2 trillion PES, exceeded by 10% and 81% compared to those achieved during the same period of 2023 and 2022, respectively. By year-end, we project to achieve efficiencies between 4.2 and 4.5 trillion pesos, which will exceed our 2024 targets. As is shown in the upper right graph, these efficiencies offset the increase in total unit cost by $0.79 per barrel, which reached $47.3 per barrel in the first nine months of the year. To conclude, the lifting costs, transportation costs, and refining cash costs were impacted by exogenous factors related to inflation, gas prices, the El Nino phenomenon, and the exchange rate. Nonetheless, when we normalize these effects in each of the aforementioned metrics, cost levels are similar to those obtained in the first nine months of 2023. Now, I will turn it over to David. who will discuss the main milestones of the energy for the transition business line.